Walmart ‘Encourages’ Investors With Q3 Street Beat, Comp Growth

Walmart Store
A Walmart store in Miami.
Getty Images.

It’s not all dismal earnings this week.

Wal-Mart Stores Inc. gave the market a nudge Tuesday with in-line revenues and comparable store sales and better-than-expected Q3 earnings.

“Overall we had a good quarter,” said Walmart President and CEO Doug McMillon during the firm’s conference call. “We delivered earnings per share well within our guidance range, recorded our fifth straight quarter of positive comps at Wal-Mart U.S. and had solid international sales and profit growth on a constant currency basis.”

At the same time, the CEO continued, the company still has plenty of work to do.

Operating income slid 8.8 percent year-over-year, or 5.4 percent on a constant-currency basis. McMillion attributed the decline to the company’s investments in increasing employee wages — something that has stirred quite a lot of controversy in recent weeks.

Other sources of earnings pressure, McMillon said, came from ongoing currency impacts.

Comp sales at Walmart U.S. grew 1.5 percent in Q3.

The company’s share price was was up 5 percent at press time.

Net Income: Net income declined 8.8 percent, on a reported basis, to $5.7 billion — compared with earnings of $6.3 billion in the same year-ago quarter.

EPS: Earnings per diluted share were $1.03 in the third quarter ending Oct. 31, 2015.

Net Revenue: Total revenue was $117.4 billion compared to revenue of $119 billion in the same period last year, a decline of 1.3 percent.

Adjustments: On a constant currency basis, total revenue was $122.4 billion, an increase of 2.8 percent.

Hit, Miss or Beat: Analysts polled by Yahoo Finance predicted EPS of 98 cents and revenues of $117.8 billion.

Analyst Insights: “We found the U.S. consumer — they went to Walmart in Q3. We’re encouraged by Walmart U.S. comps and better 3Q [gross margin] on cleaner inventories (U.S. inventories down 1.9 percent in comp stores).” — Oliver Chen, Cowen and Co. analyst